FORMER chancellor Nigel Lawson has called on the Treasury to force Royal Bank of Scotland to offer loans to small businesses on a not-for-profit basis.
Lord Lawson of Blaby yesterday said increased lending to small businesses by RBS and, to a lesser extent, Lloyds – both state-owned – would boost the economy alongside Bank of England and Treasury schemes for quantitative easing and credit easing.
“(We should) use the control that we have over these banks to promote the lending to small businesses, not on a loss making basis but on a break even basis.”
He also criticised the previous government’s bailout, which he said was “far too favourable to the banks”.
Earlier this year Business Secretary Vince Cable threatened “further action” after British banks missed their target for small business lending, agreed under Project Merlin.
A spokesman for the Treasury said it agreed with Lord Lawson on the importance of lending to small businesses. “This is a key part of the Merlin agreement, which is on track to deliver its lending target of £190bn by the end of this financial year.”
RBS said it has launched a number of discounted lending initiatives, such as a £1bn manufacturing fund and a £100m franchise fund.